FHA

An FHA Loan is Insured by The Federal Government (since 1934) and underwritten to Guidelines laid down by HUD

Here are some Facts:

  • Minimum Downpayment = 3.5% of purchase price
  • Downpayment can be Gifted or come from Downpayment Assistance programs
  • The Loan has a one-time Upfront (UFMIP) and then annual Mortgage Insurance Premium (for the life of the loan).
  • No income or Geographic Limits
  • Not just for first time homebuyers
  • Home must be for owner occupancy
  • Rates offered include 15,20,25,30-year fixed as well as ARM products
  • Available for Purchase and Refinance
  • Although FHA doesn’t have a minimum FICO Score requirement, typically 580 minimum score required (640 for more flexible Underwriting)
  • No cash reserves required
  • Properties financeable include Manufactured Homes, Condos, Townhomes, 2-4 Unit multifamily as well as Single Family dwellings
  • Special FHA loan (FHA203k) allows funding for purchase and rehab/remodel cost of a home at same time
  • FHA Streamline: a special refinance loan to drop payment without appraisal and without income qualifying
  • FHA loan limits vary County by County
  • Seasoning Rules Since Past Derogatory Credit Events For FHA Loans (i.e. since Foreclosure, Bankruptcy, Short Sale) See informative Video at www.homebuyerworld.com/charlesvamadeva

FHA 203K

  • This is a special FHA loan whereby the Buyer can ‘roll’ in the purchase price (“A”) + Cost of repairs/remodel work (“B”) = total “C” all into ONE LOAN (we lend 96.5% of “C”)
  • Two types of FHA 203k loan (Streamline FHA203k = repair costs < $35,000 and no Structural work) and Standard FHA203k (If structural work required, i.e. if a permit has to be pulled for example)
  • Minimum FICO score 640 (typically)
  • Properties financeable include Manufactured Homes, Condos, Townhomes, 2-4 Unit multifamily as well as Single Family dwellings.
  • Here are the Steps (In Order) of How the 203k Loan works:
    • Show Home/Make list of Repairs
    • Buyer contacts me (Loan Officer)
    • Buyer chooses a Licensed Contractor and sometimes a FHA 203k Cost-Consultant from HUD approved list
    • Consultant can write up list of repairs needed to bring property to code and Contractor provides a “bid” or “cost quote”
    • Provide Loan Officer with Quotes
    • Make offer & Sign Purchase Contract (RPA) (RPA must be “Subject to 203K loan”)
    • Appraisal Ordered
    • Normal Loan process to Closing –typically takes 30-45 days
    • Loan Closes, Seller paid off, Realtors® commissions paid in full.
    • repair work begins on property
    • Job completed, inspected, funds paid fully to Contractor